Archive for December, 2009

ALONE then; now WELL, & NO LONGER EXCEPTED

‘Remembering Christmas Eves 1968 and 2005’

The week between Christmas and beginning of a new year is oft used to pause, remember, and reflect on pivotal and watershed moments in life; how such events and circumstances continue to affect one’s contemporary personal or corporate experience; and ponder the influence they might have during the months ahead.

Christmas Eve has long held special spiritual, personal and familial meaning to me, especially those of 1968 and 2005…

1968. Nine months into my 13 month tour of dutyas a young U.S. Marine combat engineer officer, I found myself at Vandegrift Forward Combat Base (nee ‘Landing Zone Stud’), 40 or so ‘clicks’ (kilometers) West of Dong Ha Combat Base in Quang Tri Province, Republic of Vietnam. It was Christmas Eve, and my shore party platoon, comprised of helicopter support team members, and I were hunkered down for that night of nights, in a large underground earth and timber bunker.

Earlier that week I received a couple small packages from home, Christmas presents wrapped first with colorful paper, then covered over with brown grocery bag rag. It was quiet that eve, with a clear sky. No ‘incoming’ (rockets) or small arms fire so far. So I decided to sit alone atop the bunker and open the presents, while thinking of my wife Carolyn, and toddler Susan, way back home. Boy, talk about feeling really Alone! Not sure I ever felt more Alone before that night, I know I certainly haven’t since. And while it wasn’t the most traumatic or emotional experience endured in Nam, it sure convinced me how incomplete each of us is, without someone to hold near and dear, in good times and bad.

Then it happened! Seemed, in an instant, all hell broke loose. Small arms fire, some automatic, erupted around the entire defensive perimeter of the base; pop flares whooshed skyward and burst, illuminating everyone with their bright light; even some signal star clusters arched out from Stud, over into Indian country (enemy territory). Fortunately, it wasn’t a wholesale response to an attack, or attempted breaching of our barbed wire barricades, just a bunch of Marines intent on celebrating Christmas Eve the only way they could, by using gunfire and pyrotechnics, half a world away from loved ones back in the states. The ‘mad moment’ was short-lived however, as officers and noncoms started hollering ‘Cease fire, cease fire!’ And with the restored quiet, came that Alone feeling again.

Three months and one major engagement later, I left RVN behind and returned to my family in Philadelphia, PA. For the next 37 years I kept most Vietnam combat memories bottled up inside. While it had been the most exciting, challenging and dangerous 13 months of my life, so far, it had also been the loneliest of times. On one hand, I didn’t want to relive trauma better left behind, so I thought, on the battlefield. On the other hand, I realized not only how Alone I’d felt that Christmas Eve, and most other nights; but now, how potentially permanently Alone, I’d selfishly risked my family, when going off to war. And that’s something I’ve lived with ever since…

2005. I penned the short story ‘Making Amends’, a few years ago, describing how a chance encounter Christmas Eve 2005, enabled me to finally relate adventures, and some of the trauma experienced during 1968 and 1969 in Vietnam, from the Khe Sanh Combat Base breakout to a near death experience, during Operation Dewey Canyon, along the Ho Chi Minh Trail bordering Laos in the Ashau Valley.*1

Two additional results of this pivotal, watershed moment – and I’ve not written publicly about this before, is it completed a multifaceted emotional healing process 40 years in the making; and something else.

When I returned to the states during Spring 1969, I was incapable of crying; inclined to laugh, instead of grieve, when relatives and friends died; and, unable to show much affection to those closest to me. Ten years later, during healing prayer administered by close friends one Friday night, I regained the ability to cry! Today I can easily weep during a movie, even while reading a poignant part in a book, but still find it difficult to shed tears among family members. It took even longer to attend funeral services and respond appropriately. And today, it’s not as easy as I’d like, to sow warm affection to my spouse, children, grandchildren and great grandchildren. Why? Best I can figure; when my Marines were killed, wounded or injured in RVN, it was often vital, during and soon after combat, to appear and to be, in full control of one’s emotions and actions, not crying, unflinching facing violence and death, leading by example at all times. That extreme conditioning did not disappear when I returned home. And to this day, I suppose – deep down, I fear – once again, to be the stalwart one, if a tragic turn of events affects my loved ones….

As a related aside; the third result, portrayed in the words that comprise ‘Making Amends’, is how alienation morphed into acceptance between two individuals whose lives couldn’t have been more disparate in 1968, now reconciled on Christmas Eve 2005, with neither one any longer excepted….

So, during the days between Christmas and New Years day, since 2005, I’ve made it a point to pause, remember, and reflect on pivotal and watershed moments in my life, and how these events and circumstances might affect personal and corporate experience during the 12 months ahead. My 2010 epiphany? ‘I’m no longer Alone; I can truly empathize; and, I appreciate the efforts of others, as some have finally appreciated me.’ So, how ‘bout you? Might this be a timely and worthwhile exercise for you, thisweek, as well? Think about it!

End Note.

1. Copies of the short stories: ‘Making Amends’, ‘PUC Beer’, ‘Got Rep?’, and ‘The Chester Flashback’ are free and available on request, by simply responding to this Blog, via email: gfa7156@aol.com, or telephoning (317) 346-7156.

Postscript I.

If you’re a loyal reader of this weekly blog, you’re likely wondering if and when there’ll be follow – on episodes to chapters # 1, 2 and 3 of the Manufactured Housing and Landlease (nee manufactured home) Community Manifesto, Opportunity to Make History Together, and Gantlet. Answer?You bet! Chapter # 4, very tentatively titled, ‘Where Are Our Elected Leaders?’ is nearing completion; and, Chapter # 5 should be the most exciting episode ever. Why?A Plan! That’s right, since no cogent plan is apparently forthcoming from Washington, DC., from anyone – anytime soon, some business owners (i.e. ‘People with ‘skin in the game’, as is oft said!) are crafting a new Business Model for the MHIndustry, its’ advocacy organizations, and to a lesser extent, the LLCommunity asset class. Hopefully, both chapters will debut sometime during January and February 2010. Want to participate? Here’s how! Pen your ideas, regarding what you think and believe it will take to ‘Save Our Industry’ and email or mail (GFA c/o Box # 47024, Indianapolis, IN. 46247) them ASAP! Remember; the premise towards which we’re focusing our attention these days is how to counter:

‘Imagine No New HUD Code manufactured homes by year 2010!’

Frankly, the most frequent rejoinder I’m hearing and seeing (in letters and emails) these days is, “George, you’re being too generous with the premise time frame. Frankly, I don’t see new HUD Code homes being manufactured and shipped beyond year 2015!” Yikes! Do YOU see our lot as being that bad? If so, run – don’t walk – to the nearest computer and get your ideas and suggestions off to me right away! If not, I’d still like to hear why. GFA

And if you’re really caught up in this national conversation about the present and future of the HUD Code manufactured housing industry, you’ll want to be present at the Manufactured Housing Institute’s Winter meeting in Savannah, GA., on 2 February 2010. Why? Because ‘If you’re not at least attempting to be, or become, part of the solution to our industry’s ills, you’re likely part of the problem!’ Be there, in part, to challenge William Matchneer, HUD’s Associate Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing, as to why that federal agency appears to work so hard to stymie manufactured housing’s acceptance as housing (vs. trailers) by dint of not fully implementing the Manufactured Housing Improvement Act of 2000 (‘MHIA@2000’), refusing to name a noncareer administrator (instead of him) to oversee the work of the Manufactured Housing Consensus Committee (‘MHCC’)! To register, phone Thayer Long @ (703) 558-0678…he’s on vacation this week, so you’ll likely have to leave a message. And, while you’re at it, phone Danny Ghorbani, executive head of the Manufactured Housing Association for Regulatory Reform (‘MHAR’) and request to be put on his email mailing list for his group’s ‘Watchdog’ warnings about HUD’s latest machinations and maneuverings. (202) 783-4087. See you in Savannah? Hope so!

Postscript II.

Savvy MHIndustry & LLCommunity businessmen and women already subscribe to the Allen Letter Professional Journal; in part, because they know at this time of year they’ll receive the 21st annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’) as a lagniappe (‘freebie’) with the January issue of the newsletter! Otherwise, the ALLEN REPORT, alone, costs $250.00., so, a savings of $115.05 for those who’ve invested $134.95 in an annual subscription to ALPJ. It’s not too late! The January issue of the newly reformatted newsletter will be distributed late this week or next week. Call the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe today! Credit card orders encouraged.

Haven’t read chapters # 1 & 2 of this unfolding, punishing tale? It’s highly recommended you access archived blogs at community-investor.com & read ‘Let’s Make History Together!’. It contains ‘The Near Perfect Storm Manifesto’ and premise toward which this and subsequent chapters are and will be focused. GFA

Don’t overlook the End Notes to this week’s Blog. They contain pithy information rounding out points made throughout the body of the material.

*****

Echoing the premise of the widely read ‘Near Perfect Storm Manifesto’, yet another veteran business owner recently opined: “We need (as anindustry & asset class) to wake up or die!”*2 So, what have other entrepreneurs and senior corporate executive peers been saying and penning these past few weeks?

One long experienced, hands – on, Chicago – based respondent put it this way:

“We must get back to our roots of (housing) affordability, customer satisfaction, and quality of product and service! There are some landlease (nee manufactured home) community owners/operators doing VERY WELL these days because they routinely deliver core values and more, to their customers and residents.

LLCommunity owners/operators MUST finance their own home sales and or have ‘skin in the game’ (via recourse), when it comes to marketing new homes on – site. There’s no financing White Knight coming to save us anytime soon!

The model of how LLCommunities ‘work’, from several perspectives, must be rethought. The old days are gone, and the dinosaurs of the asset class (including me), must wake up to a new reality! Rent raises must be curtailed; massive capital infusions used to build and improve infrastructure to support new homes and site upgrades; and, a new breed of professional property managers is needed to better run our properties. The economic, political and social landscapes or our Business Model must change. (lightly edited. GFA)

While I generally agree with this colleague’s assessment of, and challenge to, our existent realty and home sales Business Model, let’s view the matter from a broader perspective:

Yes, many veteran LLCommunity owners/operators are doing VERY WELL these days, frequently selling new and resale homes on – site, often engaging in one form or another of self – finance*3, using excess cash flow from the property proper, having paid down or retired their original or refinanced real estate mortgage. On the other hand, some veteran owners/operators have been greedy, raising site rent far above the traditional 3:1 ratio (apartment unit rent 3X LLCommunity site rent), resulting in severely declining physical and economic occupancy, and inability to pay operating expenses and mortgage payments.

Some newer LLCommunity owners/operators are struggling to survive because they valued and acquired one or more properties based ‘on the (rent increases to) come’; and, being novices to the asset class, made costly errors in overstaffing. However, other new owners/operators are doing ‘Just fine, Thank You’, having paid NOI – supportable prices for their investments, then parlaying this with past successful income – producing property management experience.

“I believe strongly we, the MHIndustry, have not just lost our way, we’ve lost our cheese!*4 After reading ‘The Near Perfect Storm Manifesto’ twice, I’ve come to the conclusion, we’ve really lost touch with OUR customer’s housing payment ability. I’m thinking maybe we should want OUT of our current Business Model, trade advocacy associations, and this government – controlled housing product altogether!”

“What if we build (this is the easy part) low cost, national code – compliant homes (IRC is a breeze to work in, and outlines every local housing market’s requirements), focusing attention on present resale market for site built homes of the 1950s, 60s, 70s, & 80s? Young, first time homebuyers are flocking to them with payments in hand.”

“The LLCommunity folk will have to start using long term leases, protecting the value of their residents’ homes; maybe implement home maintenance contracts; and probably offer other niceties as well.”

“We have the land, we have the communities, and all our factories can produce an inexpensive housing product. So, how ‘bout if we join the enemy – the NAHB*5, who likely helped put us where we are in Washington anyway, to enhance our collective power?”

Now there’s a stretch! Others ‘out there’ thinking along similar lines? If so, we need to hear from you right away. If not; OK, but your reasoning and ideas to Save Our Industry need to be heard and expressed as well. Think about it. What other forum do we have today, with the passing of the Manufactured Home Merchandiser and Modern Homes magazines? None really. If you don’t know why, ask me personally sometime….

Here’s a conundrum (‘a hard question or riddle’) of sorts. The numerous written and verbal responses to aforementioned manifesto and blog, i.e. Chapters # 1 & 2 of the MHousing & LLCommunity Gantlet, have been 100 percent positive in nature and content. Frankly, I didn’t expect such overwhelming agreement and support. So, I went in search of contrary points of view and perspective, and found a few. But while I encouraged written expression of their converse views, offering to protect the identities of those expressing opinions, the dissenters have remained pococurante. Go figure.

Where does all this leave us today? Frankly? On the national advocacy scene, ‘nigh lost and without a reliable, true compass!’ How so? Allow me to explain and recommend a course of personal and corporate action:

Manufactured Housing Association for Regulatory Reform or MHARR, a.k.a. MHIndustry’s regulatory ‘watchdog’ in Washington, DC., has one membership classification: HUD Code housing manufacturers; oft referring collectively to other segments of the MHIndustry as being ‘the aftermarket’. While smallest of the two national advocacy bodies, it tenaciously fights what it views as regulatory – related, cost – increasing threats to the ‘affordability’ of factory – built housing. Danny Ghorbani @ (202) 783-4087.

Manufactured Housing Institute or MHI, represents all segments (manufacturers, suppliers, retailers, lenders, and LLCommunities) of the MHIndustry & LLCommunity asset class. Given the heterogeneous nature of its members, its’ resources are spread thin on one hand; and, disagreements on policy (e.g. land use regulations) sometimes occur. Since 1996, MHI’s National Communities Council (‘NCC’) has ably met the national advocacy needs of LLCommunity owners/operators, though it’s presently without a senior executive. Thayer Long @ (703) 558-0678.

At present, there’re a half dozen significant industry and asset class issues, serving as regulatory and self – imposed brickbats, playing active roles in the MHIndustry & LLCommunity Gantlet. While there’s disagreement between MHI & MHARR, as well as among industry segments, as to appropriate order of priority of these issues, they certainly include: severe present paucity of institutional realty mortgage and personal property (‘chattel’) financing for LLCommunities and homes respectively; the quiescent state of the Manufactured Housing Improvement Act of 2000, a.k.a. ‘MHIA@2000’, and its’ intended functionary, the Manufactured Housing Consensus Committee or MHCC, still sans the non – career administrator mandated by Congress a decade ago! And then there’re the issues of national ‘brand promotion’, as in HUD Code manufactured housing being the most affordable and desirable form of factory – built housing; and, IMAGE. You know, the ‘T’ thing, and how to best deal with it effectively. And the list goes on…

Some recommended action steps. Get on MHARR’s email distribution list, read their position papers, and ask for another or supporting point of view from folk at MHI. For that matter, join and become a direct, dues – paying member of MHI, especially the NCC if you’re a LLCommunity owner/operator, and involve yourself in these ‘industry discussions’, particularly the upcoming quizzing of William Matchneer, Associate Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing, at MHI’s Winter meeting in Savannah, GA., on Tuesday, February 2nd ! Does all this sound daunting? Well, help is on the way…

Probably with the February issue of the Allen Letter Professional Journal, you’ll meet the MHIndustry & LLCommunity savvy writer who’ll be parsing MHARR & MHI press releases, newsletters and articles, to pen accurate, centrist monthly columns – for YOU, describing what these two advocacy bodies are attempting to communicate regarding political and regulatory matters inside the Washington beltway. FYI; the anonymous columnist has decades of experience in MHousing, LLCommunities, and MHAssociation leadership, and is active in the MHBusiness today! If not already subscribing to ALPJ, phone (317) 346-7156 or subscribe online via community-investor.com You don’t want to miss this!

Well, now you know almost all there is to read and hear, today, about the MHIndustry& LLCommunity Gantlet that, in large measure, prevents us from coming anywhere near to realizing our affordable housing production and shipment potential (‘Think housing finance, regulatory environments, & historic lack of sensitivity to homebuyer needs and wants!’), and achieving Max ROI relative to the LLCommunity asset class (‘Think housing finance, unwillingness to adjust site rent to fit local economic conditions, & historic lack of professional property management on – site!’) investment. Do you get the idea, that to move upwards from this very nadir of historic MHousing production & shipments, we’re going to have to stop playing softball with those contributing to the confusion described in previous paragraphs, and commit to make some changes from both the top down and bottom up (That’s YOU and ME!)?

Last week’s Blog encouraged readers to attend Georgia Manufactured Housing Association’s second Super Symposium & Showcase of Homes in Forsyth, GA. Well, guess what? The Symposium was a complete SUCCESS. More than 120 MHIndustry & LLCommunity folk were in attendance, visiting five HUD Code and one Park Model home, along with a line of Bennett Building Systems storage sheds, for renting to LLCommunity residents! The S.A.F.E. Act of 2008 got worked over pretty well, and property owners/operators were challenged to ‘Really Get Communities READY Before Selling and Financing New and Resale Homes On – site! For more information, and copies of materials shared, contact Jamie Hammons @ (770) 980-6393. The initiator of the Super Symposium concept, now a popular national industry trend, James Keller of the IMHA/RVIC was honored at this seminal event! Where’s next Super Symposium? For sure, in Albany, New York, @ 30 & 31 March 2010. For information, contact Nancy Geer of the New York Housing Association @ (518) 867-3242. Tell her George Allen told you to call! And I hear a fourth Super Symposium & Showcase of Homes is in the planning stage in Indiana (317) 247-6256X12. How ‘bout your state? Every state MHAssociaiton should do this for their members, and it’s an effective means of recruiting new members! Also, there’s a HOW TO checklist being developed, describing steps to effecting one of these stellar events. Check with Jamie Hammons or Jim Keller.

*****

End Notes.

Gantlet. “a form of punishment or hazing in which the victim (MHIndustry & LLCommunity asset class) runs between two lanes of people (e.g. politicians & regulators) and is struck by them (legislatively & regulatorily) in passing; a series of unpleasant things or events.” The New American Webster Handy College Dictionary.

Premise. “Imagine No New HUD Code Homes Manufactured in Year 2020!” or, in other words: “The Not So Secret Scheme to Regulate and Politic HUD Code Manufactured Housing Out of Business by the Year 2020…” There it is. Someone finally said and wrote what many have been thinking since 2005.

“Self – finance is ‘captive finance’ when third party collects payments and services chattel mortgage, and ‘buy here – pay here’ when LLCommunity does so.” From MHIndustry & LLCommunity Lexicon pocket card. For FREE copies of this and other training aids, call MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764.

Who Moved My Cheese by Dr. Spencer Johnson.

National Association of Home Builders in general, the Building Systems Council (‘BSC’) in particular, at 1201 15th St., NW, Washington, DC. 20005.

This ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’ will be distributed free, as a lagniappe, in January 2010 issue of newly reformatted Allen Letter Professional Journal; or available for purchase, for $250.00 via community-investor.com, & by phoning the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764 or (317) 346-7156

We’ve all heard it said: “Today, just about every landlease (nee manufactured home) community owner/operator sells, and often self – finances, new and resale homes onto vacant rental homesites to ‘get the (site) rent meter running’! But just how many homes have been sold into these unique income – producing properties to date, and what’s the approximate value of this eclectic mix of new and resale, manufactured and mobile, homes? One billion, two billion, three billion, or more, dollars? Read the 21st ALLEN REPORT (a.k.a. ‘AR’) to find out!

As a manufactured housing or landlease community (‘LLCommunity’) aficionado, are you familiar with, and conversant about, the year old phenom (i.e. ‘BDMs’!); and the emerging trends: Community Series Homes supplanting Developer Series Homes, a new Small Community Owners Forum, increasing role of the industry’s Think Tank, and how Super Symposiums/Showcases of HUD Code Homes (in IL, OH, GA, NY & elsewhere) are replacing larger, more expensive venues like the Midwest Manufactured Housing Show in Louisville, KY? All this is covered in the 21st AR, January 2010!

Were you one of 100+/- LLCommunity owners/operators in attendance at the first National State of the Asset Class (‘NSAC’) caucus in Tampa, FL., on 2/27/08; or, the Historic SUMMIT Meeting between HUD Code manufacturers & LLCommunity ‘players’ on 2/27/09 in Elkhart, IN? If so, you’ll want to read the ‘NSAC update’ in the AR, to decide whether present business conditions, and the future of your investment in this industry and asset class, warrants another critical examination of where we are today, and what we must do soon, to move home shipments off present 50,000+/- nadir (Go ahead, look it up!), ensuring continued supply of new homes for our properties in the foreseeable future! Hint: Only one firm uses network TV to promote its’ brand of homes!

Stats! 125 respondents, out of 500+/- this year! These owners/operators own and or manage 3,160 LLCommunities containing 738,833 rental homesites. The real surprise is how many of these properties and sites are controlled by the ten largest ‘players’ in the asset class. Wanna guess where national average physical occupancy and operating expense ratio (‘OER’) percentages wound up by end of 2009? Hint: ‘Down & Up!’ Believe it or not, three times more new LLCommunities ‘under construction’, but fewer property expansions during 2009 than 2008 – with an unexpected twist in the first instance. And even more numbers with which to compare one’s property portfolio. And don’t forget, all 125 AR respondents are described in terms of home office location, number of properties & rental homesites owned/fee managed, & their geographic spread!

Think you really know and understand the difference between ‘Buy Here – Pay Here’ and ‘Captive Finance’, when it comes to on – site, self – finance of new and resale homes? First comprehensive definitions and descriptions of these financial processes here in AR!

And, if you’ve been following the almost ever changing makeup of our asset class Pride of Young Lions (i.e. ‘High performing acquirers of LLCommunities’), and present status of the Daring Dozen, first identified in January 2005 AR, you’ll not want to miss this thorough update regarding all original ‘players’. And finally; anyone want to guess whether the total portfolio count of rental homesites, controlled by real estate investment trusts (‘REIT’s), grew or contracted during 2009? No hints here.

Bottom line? Where the 20th anniversary edition of the ALLEN REPORT was a two decade landmark look back and forward, at our unique real estate asset class, the new 21st edition not only covers similar, familiar territory, but provides – by far – the most comprehensive look at the generalities and specifics of the property type, so familiar to many of us, as owners/operators, but near wholly unfamiliar to the majority of commercial realty investors and lenders, the realty trade press, even professional property managers!

Reserve your copy today, by subscribing to the new Allen Letter Professional Journal!

POSTSCRIPT.

You’ll not want to miss next Monday’s Blog at community-investor.com Why?

Unless something cataclysmic occurs within the MHIndustry & LLCommunity asset class, it’s nigh time for Chapter # 3 of the unfolding saga ‘Your business future and mine’, first premised in ‘The Near Perfect Storm Manifesto’, followed by (chapter # 2), a Blog at this website titled, ‘Let’s Make History Together!’ Check it out in the archives.

Hint: The working title, today, is ‘No More Softballs!

There’re investigative journalism and op/ed initiatives afoot – well beyond the author of this Blog, preparing to challenge the lackluster and questionable reporting of MHIndustry & LLCommunity news and views. Think about it next time you pick up any of the remaining trade pubs, and peruse online ezines. Ask two questions: ‘Aside from this media, have I met, seen or heard these individuals at work in their claimed specialty?’ And, ‘How many of these folk are presently active on state and national scenes, as dues – paying, meeting attending members, of state MHAssociations, MHI or NCC, the ULI & its’MHCC – all attempting to ‘Salvage and Save Our Industry’?’ If answer to either or both questions is ‘No’, why are you…

FYI. Join your peers at the GMHA’s Super Symposium II/ Showcase of New HUD Code Homes in Forsyth, GA., from 15 – 17 December – YES, this week! Homes from a half dozen manufacturers will be on display, along with seminar presenters telling the hard truths about impending state implementation of the federally mandated S.A.F.E. Act for Mortgage Licensing (Read last week’s Blog for an ‘eyeful’ of what this is all about & how it’ll change the way you’re presently doing business!); ‘How to Know if Your LLCommunity is Truly Ready to Successfully Market, Sell & Self – finance New & Resale Homes On – site!’; and much much more! How can you afford not to be present or represented? Phone Jamie Hammons of GMHA as soon as you read this Blog! (770) 980-6393.

The state of Ohio, thanks to efforts by its’ manufactured housing association (‘OMHA’) is ‘ahead of the curve’ where the new federal program is concerned, as their state’s law becomes effective January 2010. At a recent Super Symposium on this very subject, I asked Ken Rishel of Precision Capital to outline S.A.F.E. Act related measures about which LLCommunity owners/operators and MHRetailers should be aware in the immediate future.

If not presently involved in any form of self – finance, but use outside lenders like Triad Financial Services or 21st Mortgage Corporation, as sources of financing for new and or resale home sales in one’s LLCommunity, and sales people are advising customers about lending sources, and assisting in completion of credit applications, the business entity employing the sales staff is likely going to need to be registered as a Mortgage Broker*4 in the state where said property is located. And not only that, sales personnel are going to need to be trained, likely tested, and licensed as Mortgage Loan Originators.*4

If presently involved in self – financing of homes, the business entity may need a regulated loan license*4, a Mortgage Lender Registration*4, and sales persons will likely need Mortgage Loan Originator’s Licenses.*4

In addition to state registration and licenses, there’s also a requirement for national registration, through NMLSR.*5

In certain states, relief may be available if a business entity’s sales people are prohibited from assisting customers seeking financing, except through direction to a website or telephone number of an outside licensed lender who handles the transaction in toto. If your self – finance is handled entirely by a licensed entity, the same exemption may also apply.

The servicing and collection of existing loans is not ‘grandfathered’ in the S.A.F.E. Act. And ongoing mortgage servicing and collections must be handled by a properly licensed Mortgage Lender.*4

If a business entity operates in multiple states, it must be registered, licensed and bonded in each of those states.

The basic requirements*4, pursuant to licensing and registration under the S.A.F.E. Act require fingerprinting by an approved source, a personal history given under penalty for perjury, a credit check, an FBI background check, a civil records check, bonding, and pre – licensure training (education) and successful passing of a standardized test. There’s also a continuing education requirement.

Failure to comply is a felony with a substantial fine*4, accompanied by fine for each day of violation, and an opportunity for the borrower to sue all parties involved.

If you own/operate one or more LLCommunities and the content of this Info Blog is disturbing to you, – as it should be – contact one or more of the following resources for information and assistance:

And finally; if you own/operate one or more LLCommunities in the U.S. or Canada, know that the 21st annual edition of the ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’) will be available 1/1/2010 for $134.95 from PMN Publishing @ (317) 346-7156, or free to subscribers to the Allen Letter professional journal (one year subscription also $134.95) – same phone #. Begin year 2010 informed; read all about the MHIndustry & LLCommunity ‘News, Views & How To’s’ in the Allen Letter professional journal each month!

2. ‘Not in my back yard!’, ‘Locally Unwanted Land Use!’ & ‘Build Absolutely Nothing Anywhere Near Anybody!’ Acronyms commonly used to describe local regulatory barriers to affordable housing of all types!

3. ‘Alternative Income to Rent’ measures per Allen Cymrot; cited in Landlease Community Management, available from PMN Publishing: (317) 346-7156

4. These terms and precise requirements related thereto, are going to vary from state to state, as will the penalties for violation of statutes. Seek advice from competent counsel, or a consultant specializing in compliance and finance – related issues for specific information

MHIndustry HOTLINE: (877)MFD-HSNG or 633.4764 This number is the primary source of MHIndustry & LLCommunity information shared in this Info Blog, the Allen CONFIDENTIAL! business newsletter, and the Allen Letter professional journal! Call!